Is Your Inventory Optimization Solution Actually Leading to Profits?

The Inventory Optimization link in your chain is a critical piece to increase profit. How much inventory do you carry to meet future service goals without overstock and high carrying costs? How often should you reorder, acquisition costs like inventory carrying costs will reduce profits. Your inventory optimization solution needs to balance how much to carry, how often to reorder, demand rates, gross profits, pick quantity, supplier minimum, and business rules with a methodology (the math) that maximizes your profits while minimizing your risks.

Proper inventory levels are key to ensuring the overall success of your business – too little, and you cannot meet customer demands; too much, and you are throwing money out the window. If your current Inventory Optimization solution is not allowing your business to provide consistent fill rates without overstock or out-of-stock inventory levels, you are not seeing the profits you should be. If you want to make sure that your inventory levels and profitability are where they should be, you need an inventory optimization solution that actually makes it happen.

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]]>http://www.data-profits.com/blog/stop-3-essential-inventory-optimization-elements-add-increase-profits/feed/07 Reasons Demand Driven Is More Than a Buzz Wordhttp://www.data-profits.com/blog/7-reasons-demand-driven-is-more-than-a-buzz-word/
http://www.data-profits.com/blog/7-reasons-demand-driven-is-more-than-a-buzz-word/#commentsTue, 09 Sep 2014 10:37:52 +0000http://www.data-profits.com/?p=7340What Do You Really Know about Demand Driven Demand Driven sounds impressive doesn’t it? Sales and marketing people keep saying you need to be ‘Demand Driven’ and let’s be honest, most marketing and sales folks are like politicians, they can say a lot that sounds amazing but do very little to support their message or […]

What Do You Really Know about Demand Driven

Demand Driven sounds impressive doesn’t it? Sales and marketing people keep saying you need to be ‘Demand Driven’ and let’s be honest, most marketing and sales folks are like politicians, they can say a lot that sounds amazing but do very little to support their message or meaning. To understand the importance of Demand Driven, you need to identify what is true and what is false about Demand Driven concepts, otherwise the Buzz Term Demand Driven just becomes a Buzz Kill.

Demand Driven is an essential link in the supply chain for Omni-channel retailers and wholesalers. It may surprise you how much you do not know about demand driven and the value it offers your company. We have prepped seven questions that highlight key aspects or concepts for a demand driven supply chain.

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]]>http://www.data-profits.com/blog/7-reasons-demand-driven-is-more-than-a-buzz-word/feed/04 Inventory Replenishment Software Danger Signshttp://www.data-profits.com/blog/4-inventory-replenishment-software-danger-signs/
http://www.data-profits.com/blog/4-inventory-replenishment-software-danger-signs/#commentsTue, 26 Aug 2014 10:47:31 +0000http://www.data-profits.com/?p=7331Is Your Inventory Replenishment Software Working? When you have out of stocks and overstocks at the same time, the question you need to ask is Do You Need better Inventory Replenishment Software? Inventory Replenishment is a critical link in your chain. Ask yourself, is your current inventory replenishment software delivering the best service levels to […]

Is Your Inventory Replenishment Software Working?

When you have out of stocks and overstocks at the same time, the question you need to ask is Do You Need better Inventory Replenishment Software? Inventory Replenishment is a critical link in your chain. Ask yourself, is your current inventory replenishment software delivering the best service levels to match your customer demand? Does your inventory replenishment software maximize profitability with inventory optimization technology to create purchase orders? Do your automated Purchase Orders minimize inventory to carry only what is needed to meet service goals and still meet supplier shipping requirements? Do your users have tools on the Purchase Order pages to aid the Purchase Order approval and exception management processes? If not, then why not, what are you losing to your competition every day you do nothing?

There are essentially four different aspects of successful inventory replenishment and sadly the forth is often missing in the inventory replenishment software:

What – Demand Forecast is the future demand of your products – this drives replenishment.

When products need to be reordered to meet demand (Demand Driven Lead Times tell you the item order point – bottom up (JIT), not a plan)

How many Units of those products need to be ordered? Your days’ supply should be calculated based on demand forecast, not last x week’s sales, using on hand and on order inventories. How many units to purchase should be the difference between your Order Up to Amount (max) (SS+LT+OrCy) – (on hand + existing on order). The amount should be rounded to next product UOM pack listed by the supplier.

While some inventory replenishment software applications are capable of helping you meet one, maybe two of these PO needs, there is much more involved in the process if you want to ensure maximum profits with minimal expense.

These four aspects of inventory replenishment software are also the four danger signs. Any one of these done wrong can bankrupt your company eventually. Do two or more of these wrong consistently and you can expect the end of your company.

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]]>http://www.data-profits.com/blog/4-inventory-replenishment-software-danger-signs/feed/0Solution Found For Promotional Inventory Replenishmenthttp://www.data-profits.com/blog/solution-found-for-promotional-inventory-replenishment/
http://www.data-profits.com/blog/solution-found-for-promotional-inventory-replenishment/#commentsWed, 20 Aug 2014 11:07:31 +0000http://www.data-profits.com/?p=7319Promotions are Huge, That Doesn’t Mean Inventory Should Be You’re very familiar with the importance of promotions, how they can make or break sales figures for the quarter or even the year. But an extremely successful promotion brings to light a challenge: Inventory Replenishment. While we often think of general retail for sales events to […]

Promotions are Huge, That Doesn’t Mean Inventory Should Be

You’re very familiar with the importance of promotions, how they can make or break sales figures for the quarter or even the year. But an extremely successful promotion brings to light a challenge: Inventory Replenishment. While we often think of general retail for sales events to model, it is the grocery industry and their weekly promotions that highlight the pain in the promotion link of a supply chain. Let’s take a look at the root of the problem, and how the challenge can be overcome with ingenuity and technology to give you an edge over your competition.

When you’re doing a promotion in your retail store, it’s not always about clearing out overstock. Sometimes getting a product that has modest sales to become a big money maker takes putting it on promotion to curve demand, guiding consumers to your store for the product. When that’s the case, being able to get restock to prolong the profit-making potential is paramount. If you don’t have the product in stock, you can’t make profit from the sale, and that’s a problem worth beating.

Conventional ‘Wisdom’

The challenge with promotion inventory replenishment isn’t a new one, therefore, the market is flooded with various individual’s ‘wisdom’ of how to solve it. The problem is, if you were to ask a group of people from different retail environments how to tackle the problem, it’s quite likely that all of them will give different answers. Google the term, and you’ll get thousands of suggestions, from simple methods like ‘order three times as much as you normally would, it works!’, to ‘eh, just let rain checks take care of it’. The problem with these scenarios is that they almost always fall apart.

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Inventory Replenishment Software’s Hidden Agenda

Demand Driven Inventory Replenishment sounds nice. If your inventory replenishment software uses demand forecasting and incorporates demand concepts to calculate what products to order when and how much to order, tell us have you reached perfection? Sadly, most inventory replenishment software apps are missing a critical component – profit. Most Inventory Replenishment software was written to focus on meeting plan and staying in-stock. A quick review of the number of retailers who have gone away in the past 3 years highlights the success of that strategy.

In reality, inventory is money, and how you put that money to work will be seen in your results. Some days, it is smart to be in certain investments and some days it is best to sit out and wait. That is a key concept to achieving a demand driven inventory management process. Sound strange – let’s test the idea with a popular business executive’s story.

Shark Tank

Heralded businessman Kevin O’Leary is often quoted saying he views his money as little tiny soldiers. He sends them out every morning with instructions to take prisoners, and bring them back to him. This philosophy is one of the key things he credits with his success.

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]]>http://www.data-profits.com/blog/the-truth-about-demand-driven-inventory-replenishment/feed/0Six Common Promotion Management Issues – Which Do You Fix Now?http://www.data-profits.com/blog/six-common-promotion-management-issues-which-do-you-fix-now/
http://www.data-profits.com/blog/six-common-promotion-management-issues-which-do-you-fix-now/#commentsWed, 06 Aug 2014 11:07:58 +0000http://www.data-profits.com/?p=7296Customers Expect Retail Promotions Your Promotion Management process has become a critical link in your chain. Customers expect promotions and events in the marketplace today. How do you match the right inventory with the right products at the right location and price? Most of you build a promotion plan like always and then hope for […]

Customers Expect Retail Promotions

Your Promotion Management process has become a critical link in your chain. Customers expect promotions and events in the marketplace today. How do you match the right inventory with the right products at the right location and price? Most of you build a promotion plan like always and then hope for the best each month. Funny how that’s almost like buying a lottery ticket. In fact, the lottery ticket is cheaper, and the ROI is significantly higher for your dollar investment.

The goal of promotion management is to achieve the maximum ROI (return on investment) when implementing a newly developed promotional program, while also achieving balance between trade spend and incremental volume. After setting the goal, you create a promotion plan and often link that to your open to buy. A few more advanced companies will try to connect the future promotion to past similar promotions by linking the results to project the new promotion sales. The problem is you are creating a goal and a plan without the key middle step: ‘Create a Strategy to Achieve your Promotion Goal’.

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ATLANTA, July 22, 2014 /PRNewswire/ — Data Profits Inc. announced the release of their iKIS™ Retail Promotion Solution that extends End-to-End Promotion Planning for the Retail, Wholesale, and Grocery Industries.
Data Profits (http://www.data-profits.com), a leading mid-market Supply Chain Management (SCM) solution provider delivering key demand driven forecasting and inventory replenishment functionality that leads to higher supply chain performance and profitability, is excited to offer new functionality to its customers and their suppliers that provides an end to end solution for trade promotion planning and execution.“Today’s competitive marketplace is putting tremendous pressure on retailers to increase revenue and improve margins”, stated Stuart Dunkin, CEO of Data Profits. “Leading retailers are looking to maximize promotional lift by offering unique deals across all channels and track them end-to-end, from creation to settlement.”
“Successful promotion execution today requires online tracking of negotiations with vendors, consensus forecasts on promotional lift and inventory, along with shared feedback to suppliers during the event to ensure maximizing promotional lift. Post promotion, all parties want the settlement process automated to ensure full margin realization at the lowest possible cost.”

The Key Features of the System:

Electronic Deal Negotiation: The cloud based system dynamically supports the deal negotiation process to its fulfillment as a legal electronic agreement.

Real time Promotion Feedback: Monitor promotion lift with Scorecards and End-to-End service alerts to improve sales and customer satisfaction.

Settlement Execution: Vendor billing for each trade promotion claim is initiated and tracked by status for all partners.

Stuart Dunkin, CEO of Data Profits, “We see the next few years as ones where retailers and distributers are looking to align and link their supply chains End-to-End from a demand driven perspective. Using our collaboration platform that includes customizable workflow and analytics, we can deliver better results, supporting new collaborative behaviors and smarter outcomes for our customers and their partners. Only Data Profits’ iKIS™ solution allows businesses to “Tighten the Links in Your Chain™.”

About Data Profits (www.data-profits.com)viagra usa, delivers a set of critical abilities to mid-market retailers, wholesalers, manufactures, and their suppliers, including Demand Forecasting, Inventory Replenishment, Collaboration with Supply Chain Visibility, and Proactive Management alerts. Developed with the guidance of both customers and leading technology experts, Data Profits’ software is implemented and running in less than 30 days at a cost less than 50% of legacy providers. Using iKIS™, teams can work within one business network to see immediate results on supply chain activities. Data Profits’ real-world experiences demonstrate solid thought leadership that returns significant ROI for customers in 90 days driving actions to “Tighten the Links in Your Chain™.”

]]>http://www.data-profits.com/press-releases/data-profits-retail-promotion-software-delivers-promotional-forecasting-and-management-for-retail-wholesale-and-grocery-industries/feed/0Five Secrets of Successful Inventory Replenishment You Need to Knowhttp://www.data-profits.com/blog/five-secrets-of-successful-inventory-replenishment-you-need-to-know/
http://www.data-profits.com/blog/five-secrets-of-successful-inventory-replenishment-you-need-to-know/#commentsTue, 15 Jul 2014 10:37:47 +0000http://www.data-profits.com/?p=7253Inventory Replenishment Checklist Knowledge is power, as the old saying goes, and that’s certainly true about Inventory Replenishment. Let’s review this critical link in your supply chain and identify where you need to tighten down your processes. Inventory replenishment is ultimately about knowing what to order where, when and how many to meet demand for […]

Inventory Replenishment Checklist

Knowledge is power, as the old saying goes, and that’s certainly true about Inventory Replenishment. Let’s review this critical link in your supply chain and identify where you need to tighten down your processes. Inventory replenishment is ultimately about knowing what to order where, when and how many to meet demand for service while maintaining the lowest operating cost (inventory optimization) to maximize your profits.
Here are Five Things (click here to learn why) everybody should know when it comes to inventory replenishment. We have attached links for a deeper dive to each of the individual points.

]]>http://www.data-profits.com/blog/five-secrets-of-successful-inventory-replenishment-you-need-to-know/feed/0Common Demand Driven Issues: Which Do You Fix First?http://www.data-profits.com/blog/common-demand-driven-issues-which-do-you-fix-first/
http://www.data-profits.com/blog/common-demand-driven-issues-which-do-you-fix-first/#commentsWed, 25 Jun 2014 10:37:58 +0000http://www.data-profits.com/?p=7231Revolutionize Your Demand Driven Business Running an efficient business is vitally important in today’s business climate. With so many variables, though, that can be an extremely daunting task to accomplish, and many ‘solutions’ are ineffective or provide minimal impact, taking years to pay for themselves. Demand Driven is a concept people think they have mastered […]

Revolutionize Your Demand Driven Business

Running an efficient business is vitally important in today’s business climate. With so many variables, though, that can be an extremely daunting task to accomplish, and many ‘solutions’ are ineffective or provide minimal impact, taking years to pay for themselves. Demand Driven is a concept people think they have mastered when in reality it is the link in their chain that needs immediate attention. Let’s take a look at a few of the areas that should get special attention to make sure your business is Demand Driven.

One of the standard methods for achieving in-house forecasting is comparing sales from previous dates to today’s sales. The problem with this approach, though, is that there are a lot of specifics that go into how inventory moves on any given day, and those aren’t tied to a specific date but rather to industry buzz, price differences, and more. A quality demand forecasting solution takes those into account and makes things much more efficient. The reality is many (most) legacy forecasting software solutions only run a few forecasting algorithms due to hardware constraints when the software was written. Your business needs more than 2 or 3 forecast algorithms, you need forecasting algorithms for slow and intermittent demand and also algorithms for promotion and other market events. In addition to several forecasting algorithms, you need a focus on demand for all demand types: regular, promotion, event, and closeout.

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Predicting the Unpredictable: Inventory Optimization Software

Inventory Optimization – nine syllables, two words, one concept. It means having what you need when you need it. Too much inventory can cut your profit margin; too little inventory can prevent you from meeting demand and tip your customers toward the competition. Sounds simple: but in reality, the inventory optimization math any supply chain process will use is as important as the metal alloy used in forging a chain of metal links. You can find cheap, plastic chains, and you can find expensive chains formed from strong metal alloys with all kinds of irresistible names and features.

The question is: How do you calculate your optimal inventory level? It’s like trying to predict the weather – no matter how many variables you take into consideration, you inevitably fail to account for something – Offshoring, transportation costs, commodity trends, globalization, new product introductions, extended supply chains – all these factors and an infinity of others make optimizing inventory levels a daunting task. Frankly, it is too much for the human brain to handle.

Inventory Optimization using Advanced Software

But that is why we invented computers. New IO (Inventory Optimization) software is helping businesses to predict the unpredictable. With the proper tools, you can estimate your inventory levels to maximize profit and minimize waste. Modern software can account for many different variables, the potential outcomes and summarize the choices into a simple set of graphs and charts, allowing the user to pick the best model for their business for each of their product groups.

Single and Multi-Echelon Inventory Optimization

On the whole, IO technology can be divided into two broad categories: single-echelon software and multi-echelon software. These categories are surprisingly self-explanatory. Single-echelon software can handle inventory estimates for stand-alone operations – a single distributing plant, for instance. Multi-echelon software, on the other hand, is ideal for predicting inventory needs for multi-tiered operations – say the aforementioned distributing plant comprises a single hub in a company composed of a network of specialized hubs, each with its own optimal inventory levels. To put it another way: Single-echelon software can regulate traffic on Interstate 40, whereas multi-echelon software can regulate traffic on the country’s entire Interstate system.

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